BEST OF THE BROKERS

BRITISH AMERICAN TOBACCO
Jefferies has started covering the tobacco group with a “buy” rating and a target price of £31.87. The broker sees strong cash generating capacity, given the firm has one of the highest exposures to emerging markets in the sector with 66 per cent of sales coming from new regions, plus the possibility of a tie-in with in China. BAT’s dividend and share buyback policy also offers generous cash returns to investors, the broker adds.

SCHRODERS
Credit Suisse rates the wealth manager “neutral” with a target price of £18.50. The broker thinks Schroders’ earnings and valuation are becoming increasingly attractive compared to the firm’s peers, particularly given its strong earnings momentum. Credit Suisse expects £4.4bn of retail net inflows during 2011, and has raised its earnings per share forecast by 17 per cent to 135p for the year on the back of a lower than expected tax rate.

SIGNET JEWELERS
Investec rates the jewellery retailer “buy” with a £31 target price. The firm remains a class act within the mainstream US market, the broker thinks, supported by a track record of market share gains over the last decade. Despite uncertainty about the likelihood of a shareholder return in the short term amid hints about increased capital expenditure, long-term momentum has led Investec to raise its target price by 200p.